A Reaction of the Bhopal Case
This reaction paper is based on the ethics case: Bhopal-Union Carbide. First, I discuss an overview of the case. Second, I relate the case to principles discussed in class. Third, I evaluate the various points raised in class and present my point of view. Overview of the case
In December 1984, the pesticide producing plant, Union Carbide, leaked methyl isocyanate gas in Bhopal, India. A substance that accidently entered the methyl isocyanate storage unit caused the gas to boil and leak into the air. The leak was undetected for over an hour since the plant’s manager and senior operator distrusted the corroded alarm instruments. In addition, all emergency response equipment had either been disabled or was malfunctioning because of budget cuts instituted earlier in the year. Eventually the plant’s pipestack began leaking the toxic gas into Bhopal killing over 2,000 people and causing injuries to 200,000 people (Brooks 2010).
The pesticide producing plant was built in 1969 when the Indian Government wanted jobs and needed pesticides for crops to feed a growing population. It incentivized Union Carbide to build the plant in Bhopal with cheap labour, and lax environmental, workplace, and tax laws. The Union Carbide Corporation, based in the U.S., had a 51% controlling interest in the pesticide producing plant operated by Union Carbide India. American managers determined budgets and issued technical operating procedures while Indian managers were in charge of day-to-day activities. One year before the incident, the Indian Government convinced Union Carbide to not to close the unprofitable plant to keep local jobs. As a result, budgets were slashed and equipment requiring repairs were ignored. Several safety systems that could have prevented the disaster were broken or shut down to cut costs (Brooks 2010).
Three months after the disaster, the Indian Government passed the Bhopal Gas Tragedy Act, legislating that it would provide the sole representation for survivors. In litigations, Union Carbide U.S. claimed that they were not negligent, but rather that water entering the tank was an “act of sabotage” (MacKenzie 2002). Four years after the incident, Union Carbide U.S. agreed to pay the Indian Government US $470M and was absolved of present and future responsibility, including properly cleaning up the site (Rajagopalan 2010). Principles discussed in class
There are two major ethics principles that arise from this case. The first is that an agent or agency should take responsibility for their actions. According to Moldoveanu (2012), responsibility is the “property of an agent that makes him or her willingly bear the consequences (incur the costs and claim the benefits) of his or her chosen courses of action.” The three active agents involved in this case, the Indian Government, Union Carbide U.S. and Union Carbide India, discarded their responsibilities prior to the disaster. The Indian Government neglected to enforce environmental laws, Union Carbide U.S. instructed its subsidiary to run the plant without proper equipment, and Union Carbide India failed to instruct its parent of major ongoing problems. Businesses are legally required to not be negligent in their actions, and they should take responsibility when mistakes or accidents happen. In this case, all three agents abdicated their responsibilities leading up to the incident, as well as in the lawsuit following the incident. Union Carbide U.S. and Union Carbide India called the event an “act of sabotage” while the Indian Government relinquished Union Carbide of all liabilities before the number of survivors and amount of environmental damage could be assessed (Rajagopalan 2010).
The second major ethics principle present in the Bhopal case is that businesses should balance the goal of maximizing shareholder value while maintaining their moral obligations. According to Milton Friedman (1970), the responsibility of businesses and their...
References: Brooks, L. J. 2010. Ethics Case: Bhopal-Union Carbide. Business and Professional Ethics for Directors, Executive & Accountants, 5th Edition, pp. 38-39.
Broughton, E. 2005. The Bhopal disaster and its aftermath: a review. Environ Health 2005, 4: 6. U.S. National Library of Medicine, National Institutes of Health. Retrieved from: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1142333/
Friedman, M. 1970. The Social Responsibility of Business is to Increase its Profits. The New York Times Magazine, September 13, 1970.
Kennedy, B. 2014. CBC News Moneywatch. April 23, 2014.
Moldoveanu, M. 2012. Managerial Models and Methods for Moral Reasoning. Foundations for Business Ethics, pp. 1-25.
Rajagopalan, S. 2010. An Indian Tragedy Many Times Over. Wall Street Journal, June 13, 2010.
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